Advisors to the ultra-wealthy steer clients back to bonds as yields climb
Investors have a 'generational opportunity' to create ballast in their portfolio as bond yields rise.
TL;DR
- High bond yields present a 'generational opportunity' for investors to achieve stock-market-like returns with less risk.
- Municipal bonds offer attractive tax-equivalent yields, especially for high-income investors.
- Investors are being advised to buy bonds from fearful sellers during the current market volatility.
- Some clients are hesitant to invest in bonds due to recent selloffs and past low-interest-rate environments.
- Emphasis is placed on high credit quality (e.g., AA-rated) for municipal bonds.
- Bond duration should be tailored to individual financial goals and liquidity needs, not just yields.
- Avoiding forced selling is crucial for wealth preservation through market swings.